Janet Yellen, the former chair of the Federal Reserve and Joe Biden’s nominee for the US Treasury Secretary, changed her stance on cryptocurrencies and mentioned that Bitcoin and other cryptocurrency assets have the potential to improve global transactions.
According to her latest remarks published by the Senate Committee on Finance, digital currencies can improve the efficiency of the financial system. Yellen plans to encourage the use of cryptocurrency assets for legitimate activities.
The recent comments from the former chair of the Federal Reserve came as a surprise as she criticized Bitcoin and digital currencies for potential involvement in money laundering and terror financing in the past. Earlier this month, Yellen mentioned that cryptocurrencies are being used in illegal activities.
“Bitcoin and other digital and cryptocurrencies are providing financial transactions around the globe. Like many technological developments, this offers potential benefits for the U.S. and our allies. I think it important we consider the benefits of cryptocurrencies and other digital assets, and the potential they have to improve the efficiency of the financial system,” she said.
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In addition to the potential benefits of digital currencies, Yellen pointed out the risks associated with crypto transactions. She said that the illegal use of cryptocurrencies may result in national security concerns for the US. Yellen aims to work closely with the regulatory authorities in the country to draft an effective regulatory framework for Bitcoin and other crypto assets.
“We know cryptocurrencies can be used to finance terrorism, facilitate money laundering and support malign activities that threaten US national security interests and the integrity of the US and international financial systems. I think we need to look closely at how to encourage their use for legitimate activities while curtailing their use for malign and illegal activities,” the Treasury Secretary nominee mentioned in her official remarks.
The recent comments from Yellen came after US President Joe Biden ordered to freeze all Federal regulatory processes including proposed cryptocurrency KYC rules.